During their epic CNBC showdown, hedge fund manager William Ackman almost seemed to be daring Carl Icahn, saying “he can try to scare my investors, which it sounds like he is attempting to do. We take prudent risk at Pershing Square.”

Icahn might be scaring some of the investors in Ackman’s Pershing Square hedge funds this morning. Shares of Herbalife soared by more than 10% in Friday morning trading in New York after Icahn disclosed a big 13% stake, which includes shares underlying call options, in the controversial nutritional supplements maker. Icahn, whose personal net worth is far greater than the $11 billion Ackman manages at Pershing Square, is set to appear on CNBC on Friday to further talk up his position.

This is a very serious situation for Ackman, who in December disclosed a $1 billion short position in Herbalife. He has said in recent weeks that he has not covered a share. Herbalife’s shares are now up by 30% or so in 2013, which is certainly putting downward pressure on Ackman’s fund performance early in 2013 while the U.S. stock market continues to rise.

Investors who bet on Ackman’s $11 billion hedge fund were attracted to his big and bold bets, but it’s hard to imagine they anticipated their investment would be targeted by Icahn, a legendary 77-year-old trader who is known for playing rough and tumble in financial markets. It’s unlikely that Icahn was in their risk/reward calculation. Icahn returned the money he managed for outside investors last year and now only bets money belonging to himself and his employees.

In their CNBC deathmatch, Icahn speculated that if somebody tenders for Herbalife Ackman could be in trouble. “If that happens that stock could rush to a hundred,” Icahn said. “What the hell does Ackman do? Ask him. He is right here on the phone.” Ackman did not flinch and responded: “Carl, you want to bid for the company, go ahead and bid for the company. We don’t think any person will write a check for five or $6 billion to buy a business we believe is fraudulent.”

But on Thursday Icahn said he wanted to meet with Herbalife’s management “regarding the business and strategic alternatives to enhance shareholder value, such as a recapitalization or a going private-transaction.”

It could be a bluff by Icahn, but on the surface it seems Ackman made a mistake by publicly reinvigorating his long-running fued with Icahn. Securities & Exchange Commission filings show that Icahn’s position in Herbalife was relatively small at the start of 2013 and suggest he significantly increased it after their television confrontation.

Ackman went on CNBC in January to refute comments Icahn made about him on Bloomberg Television. Ackman said on CNBC “every time he goes on TV, I will defend myself.” After a brilliant CNBC producer, Maxwell Meyers, arranged for Icahn to get on the phone to debate Ackman live on television, Ackman made the decision to remain on the program and engage in a war of words with Icahn. “I will give you two choices,” said CNBC anchor Scott Wapner to Ackman. "You can hang on the phone and we can bring Mr. Icahn in and you guys can have the discussion with me on live television, if you’re up for that.” Ackman thought about it and replied: “If Carl wants to come on, let’s make it fun TV. Let’s put it to bed and move on.”

Ackman may end up being right about Herbalife, a company he says is operating a pyramid scheme. But Ackman's investors are probably not having a fun time this Friday. Pershing Square has underperformed the U.S. stock market for two straight years after fees, even with the big short promotion of Herbalife in December, which included a presentation on a New York City stage. This battle with Icahn is likely more than they bargained for.